And when the noted economist and columnist Paul Krugman suggested last week that Mr. Soros had taken advantage of his privileged position and engaged in a bit of insider trading, the global gossip mill began churning.

The problem, Mr. Krugman now admits, is that his charges are not true.

''I allowed myself to serve as a conduit to the media for this story, and I shouldn't have done that,'' Mr. Krugman said in an interview yesterday. ''I'm a believer that these things happen, but I don't know what actually happened and I shouldn't have conveyed that impression.''

As Mr. Krugman beats a hasty retreat from the allegations he made last week against Mr. Soros in the on-line magazine Slate, the episode shows the perils of leveling insider-trading charges against any financier, especially when it involves one of the most well-known members of the very clubby, and very cloistered, world of international finance.

Insider trading is, of course, extremely hard to prove. Mr. Soros, who declined to comment yesterday, has never been charged with insider trading during more than three decades plying the world's financial markets, most notably as a currency trader.

A spokesman for Mr. Soros's hedge fund firm, Soros Fund Management, also declined to comment, other than to point out several retractions Mr. Krugman has posted on his personal Web site and to share a letter the firm sent to Slate -- which is owned by the Microsoft Corporation -- requesting that those retractions be noted.

The brouhaha, which has also erupted in the Brazilian media, began with a sidebar to Mr. Krugman's Feb. 11 Slate column in which the Massachusetts Institute of Technology economist wrote that Mr. Soros used information gleaned from a former employee, Arminio Fraga Neto -- who is also the newly appointed Brazilian central bank president -- to successfully speculate in Brazilian bonds.

''Over the days preceding the appointment of Arminio Fraga Neto, a former fund manager for billionaire speculator George Soros, as president of Brazil's central bank, wild rumors spread through the markets: Brazil was going to default on its debt, close the banks, whatever,'' Mr. Krugman wrote. ''During that time, it turns out, Fraga was negotiating with the Government, meaning he knew that no such plan was being devised. At the same time, Soros was buying up large quantities of Brazilian debt at deep discounts. When the weekend passed the real recovered sharply, partly because Soros was now able to 'squeeze' those who had sold Brazilian debt short.''

Mr. Krugman said in yesterday's interview that his sources for the information about Mr. Soros's Brazilian trades were ''E-mails from people in the investment community.'' But Mr. Krugman, who also writes for Fortune magazine, said he had made no attempt to independently verify his sources' contentions, nor did he attempt to seek comment from Mr. Soros or anyone else at Mr. Soros's firm.

''Clearly, I wish I hadn't done it,'' Mr. Krugman said. ''I didn't think I was breaking a story. It's all been an object lesson in something or other.''

Michael Kinsley, the editor of Slate, said his magazine planned to run a letter from Mr. Fraga as well as Mr. Krugman's retractions.

''I'm not satisfied with the result in this case, but we're satisfied with the processes we have in place here to prevent these things from happening,'' Mr. Kinsley said. ''We're not foolproof but we have a pretty good record of accuracy.''

Despite Mr. Krugman's self-described reporting errors, there is little legal recourse for Mr. Soros given his notoriety and protections the press receives under the First Amendment.

''Soros is a public figure and as a result, if somebody writes something about him that turns out to be false the writer is protected so long as he believed in what he said at the time he wrote the article,'' said Floyd Abrams, a lawyer specializing in the First Amendment.

It is still not entirely clear what Mr. Soros's financial position was in Brazil prior to Mr. Fraga's appointment. Yesterday, the firm declined to discuss its trading despite repeated requests to do so.

Robert Johnson, a former managing director with Soros Funds Management who co-taught an international finance course with Mr. Fraga at Columbia University, said that he was recently assured by several Soros employees that the firm received no inside information from Mr. Fraga. Mr. Johnson said that these employees said that ''they missed opportunities in Brazil'' to make money.

For his part, Mr. Fraga said he did not disclose to anyone at Mr. Soros's firm that he was negotiating with the Brazilian Government for the central bank position until the day he resigned from the firm.

Brazil devalued its currency, the real, on Jan. 13, sending it into a free fall from which it has yet to recover and raising concerns about the capabilities of the Brazilian Government's economic team. A week later, on Jan. 20, the New York Federal Reserve convened a breakfast meeting at its offices at the request of the Brazilian Government.

The Brazilians wanted to speak with a select group of financiers about the prospects for the Brazilian economy, according to a Federal Reserve spokesman. Among those invited to the breakfast were Chase Manhattan's chairman, Walter V. Shipley; J. P. Morgan's chairman, Douglas A. Warner; Citigroup's vice chairman, William Rhodes; Merrill Lynch's chairman, David Komansky, as well as nine other powerful financiers -- and Mr. Soros.

A few days later, on Jan. 27, Mr. Fraga, a former Brazilian central bank official who was managing an emerging markets fund for the Soros firm, met with Brazilian central bank officials but did not discuss a job, Mr. Fraga said yesterday.

Mr. Fraga, who said he returned to New York the night of Jan. 28, added that a Brazilian finance ministry official first explored the possibility of the central bank presidency with him on Saturday, Jan. 30. He was formally offered the job the next day and accepted. When he arrived at Mr. Soros's offices on Monday, Feb. 1, Mr. Fraga said he resigned. He said no one at Soros Fund Management knew of the negotiations before then, including Mr. Soros, who was at a financial conference in Davos, Switzerland. Word of Mr. Fraga's appointment was made public the next day.

''I don't think people should be judged by rumors,'' Mr. Fraga said. ''Krugman wrote something based on rumors and his own imagination.''